Food Industry R&D

Helmut Traitler has a PhD in Organic Chemistry from the University of Vienna, Austria. In 2010, after decades' of experience with Nestlé in various roles around the world, Helmut co-founded Life2Years, Inc, a start-up company producing healthy beverages for the over-fifties.Birgit Coleman holds a Master of Arts in Business, MA from the University of Applied Sciences, Vienna. She is a strategic thinker and Connections Explorer in her current role at Swissnex San Francisco.

• About the Authors xviiForeword xixPreface xxiAcknowledgment xxiiiPart 1 WHAT WE HAVE TODAY AND HOW WE GOT HERE 11 A typical food R&D organization: Personal observations 31.1 Introduction 31.1.1 Business people always know better 41.2 A look back in wonderment 51.2.1 Innovation is everyone’s business 51.2.2 Let’s go and have a drink 61.2.3 Never give up and continue to hope 61.3 A look back to the beginnings of a typical food industry R&D 71.3.1 It all starts with a great idea 81.3.2 People were frightened 81.3.3 Are we depleting our resources? 91.3.4 Focus, focus, focus 101.3.5 A historic perspective 111.3.6 Let’s cut costs 111.3.7 Food industry has simple and tangible goals 121.4 From single and large to multiple and complex 131.4.1 Nutrition has growing pains 131.4.2 The new risk management approach: Many projects 141.4.3 Too many projects? No problem, reorganize 151.5 Why does the food industry need R&D after all? 161.5.1 Million dollar answers to the million dollar question 161.5.2 Here we go: Justifications 171.5.3 Because we can is a great reason! 171.5.4 New product development is everything, or is it not? 181.5.5 Consumer is king 191.5.6 It’s all about long]term thinking, stupid 201.6 Summary and major learning 21References 222 A typical food R&D organization: The world consists of projects 232.1 All R&D work is project based 232.1.1 Project has many meanings 232.1.2 Third]generation R&D 242.1.3 Strategic business units became popular 252.1.4 Organization is everything 262.1.5 Freeze the project design 262.1.6 How free can you be? 272.1.7 Small is beautiful 272.1.8 Pipelines 282.1.9 Try it out first 292.2 Project management 302.2.1 Manage or lead? Manage and lead 302.2.2 Select the right project and deliver 312.2.3 Teamwork is not everything, it’s the only thing! 322.3 All projects are sponsored 322.3.1 SBUs: The new, old kid on the block, happy anniversary! 332.3.2 Accountability and responsibility: A “repartition” of roles 342.3.3 SBU demands, R&D delivers 352.3.4 A brief comes from above 362.4 The predictable organization 362.4.1 First ritual: Research the consumer 362.4.2 From “business scenario” to “business plan” 372.4.3 More rituals 382.4.4 Projects never seem to die 392.4.5 It’s all about results 392.5 Valuation of projects 412.5.1 Your project could have delivered more! 412.5.2 That’s what others invest 412.5.3 Sell your project better: Start by explaining it so that everyone can understand it 412.5.4 Communication is king! 432.5.5 Speed is everything 432.6 Summary and major learning 44References 463 A critical view of today’s R&D organization in the food industry: Structures and people 473.1 A typical setup of a food R&D organization 473.1.1 New idea? Let’s wait 483.1.2 Food is a conservative beast 483.1.3 Small is beautiful, or is it not? 493.1.4 Ingredient is king 493.1.5 Quality and safety are not everything, they’re the only thing! 503.1.6 Technologies are always product related 513.1.7 What’s my project worth? 513.1.8 Cui bono? 523.2 The people in the food R&D 523.2.1 Do I stay, or shall I move on? 533.2.2 Twenty percent! Are you out of your mind? 533.2.3 More hoppers 553.2.4 More stayers 553.2.5 Change can be frightening 563.3 The role of discovery and innovation in food R&D 573.3.1 It’s all about discovery 573.3.2 It’s all about innovation, or is it renovation? 583.3.3 Size matters 593.3.4 Here’s a way out 593.3.5 What would the consumer say? 603.4 Additional personal observations and R&D]related stories 613.4.1 The business project 623.4.2 The secret project 633.4.3 The pet project 643.4.4 The never]ending project 643.4.5 The trial]and]error project 653.4.6 The please]someone project 653.4.7 The defensive project 663.4.8 The knowledge]building project 663.4.9 Change is needed! 673.5 Summary and major learning 67References 694 Understanding intellectual property and how it is handled in a typical food R&D environment 704.1 Quest for intellectual property: An important driver 704.1.1 Patents 704.1.2 Recipes 714.1.3 Trademarks 724.1.4 Trade secrets and secrecy agreements 724.1.5 Experts: Actions and results 734.1.6 Alliances and partnerships 744.1.7 Protect everything! 744.1.8 One last attempt 764.2 The value of intellectual property for a food company 764.2.1 Poor principles in practice 774.2.2 Change is on its way 774.2.3 Patents forever 784.2.4 Numbers and more numbers 794.2.5 And more numbers 794.2.6 Here are more and even bigger numbers 804.2.7 Is my patent actually profitable? 814.2.8 It’s all about brands! And about service level! 824.2.9 Good communication is key, great communication creates value 834.3 Intellectual property as the basis for industrial intelligence and counterintelligence 834.3.1 List everything 844.3.2 Technologies and people 844.3.3 Who are the experts? 844.3.4 Don’t ask questions, just fill in the form! 854.3.5 I want monthly highlights, although I don’t read them 864.3.6 Open up! 864.4 Commercializing IP assets 874.4.1 A good license deal is better than no license deal or so you would think 884.4.2 Licensing out most often is a deviation of the traditional business model of a food company 884.5 Summary and major learning 89References 90Part 2 POSSIBLE FUTURE OF THE FOOD INDUSTRY 915 The need for a new approach to R&D in the food industry 935.1 R&D in the food industry is inefficient: An analysis 935.1.1 Innovation at zero extra costs 935.1.2 Real changes are required 945.1.3 Small is beautiful; large becomes inefficient 955.1.4 The good, the creative, and the productive 955.1.5 What’s wrong with R&D? 965.1.6 I don’t know which half to cut! 965.1.7 Let’s eliminate every second word 975.1.8 Let’s do another budget cut 985.1.9 Innovation is key! 985.1.10 The secret: Combine sensible budget cuts with instilling a creative constraints atmosphere 995.2 R&D under the influence and guidance of consultants 1005.2.1 Consultants sell you back your idea; What’s wrong with this? 1005.2.2 It’s you or your boss who asked for help 1015.2.3 Consultants well used can be of real help 1015.2.4 Being coached is everything 1025.2.5 How to bring it to the consultant 1035.3 R&D under the tutelage and guidance of marketing and operations 1045.3.1 Marketing has greater leverage 1045.3.2 Marketing gives orders; marketing does not make compromises 1055.3.3 Operations act like a strict father 1065.3.4 A bit of humor 1075.3.5 Here’s one example 1085.3.6 Let’s be respectful with each other 1085.4 Evolutionary change in a typical food R&D organization 1095.4.1 R&D is not alone in mediocrity 1095.4.2 Let’s change, gradually! 1105.4.3 Watch out for support and best timing 1105.4.4 Cyclical versus anti]cyclical 1115.4.5 From 10 make 1 or make 10: Which do you prefer? 1115.4.6 Let us team up! 1125.4.7 Change comes easy 1125.5 Summary and major learning 112References 1146 Consumer perspectives for change to R&D in the food industry 1156.1 The fast moving consumer goods industry (FMCGI) 1156.1.1 Fast, furious, and cheap! 1166.1.2 What consumers really want? The million dollar question, the billion dollar answer! 1176.1.3 Food should be all natural it should be all this… 1186.1.4 Food companies don’t like risks; they “wait them away” 1186.1.5 Lean and efficient: Don’t you get it? 1206.1.6 Mutual understanding is not everything; it’s the only thing 1206.1.7 Here are some ways out 1216.2 The consumer in the center 1216.2.1 No risk, no fun, or else? 1226.2.2 What’s architecture got to do with this? 1236.2.3 In search of the ultimate answer 1236.2.4 Emancipate from the consumers! 1246.2.5 I think we may have the wrong people, oops! 1256.2.6 Observation and smart conclusion: Two successful siblings 1256.2.7 Observation is king 1266.2.8 What do I do with what I have seen? 1276.2.9 Tell the consumers, don’t let them tell you! At least try 1276.2.10 The ultimate downturn: Administrative processes 1286.3 The consumer]driven food R&D 1296.3.1 The “a]ha” moment 1306.3.2 Take the risk and become independent 1316.3.3 And better back it up with successful results! 1316.3.4 I want to play with my own toys and make my own rules 1326.4 Consumer groups: The public opinion 1326.4.1 Early warning is the name of the game 1336.4.2 Oops, we got it wrong 1346.4.3 Working together for the common goal: Consumer benefits 1346.5 Summary and major learning 135References 1377 University perspectives for change to R&D in the food industry 1387.1 How did we get to this? 1387.1.1 Why have “food science” and “food engineering” developed in parallel to mainstream science disciplines? 1397.1.2 Why does industry sponsor research 1407.1.3 IP “there’s gold in them there hills”: The intellectual gold rush 1417.2 The “state of the art” 1437.2.1 What does the food industry know about academia? 1437.2.2 Academics: Three different ones 1437.2.3 Nutrition, medical science, claims, and regulatory bodies 1467.2.4 Getting money from governments via grants and awards 1497.2.5 Academics as consultants 1517.3 Where are we heading? 1517.3.1 Reunification? 1517.3.2 Research as a marketing tool 1517.3.3 Crowd]sourcing solutions: Open innovation pros and cons 1527.3.4 Scientific publication in the future 1537.3.5 A multidisciplinary future 1547.3.6 How to collaborate better? 1547.4 Summary and major learning 154Reference 1568 Industry perspectives for change to R&D in the food industry 1578.1 A typical food industry set]up 1578.1.1 Branded products or private label? 1588.1.2 The food industry: A champion of complexity 1588.1.3 Some stories: Small food businesses and simplicity in their setup 1598.1.4 How it all started 1608.1.5 A bit of history: Strategic business units 1618.1.6 It’s getting really confusing now 1628.1.7 One important change of R&D setup as a consequence of a changing business structure 1628.1.8 What’s first: The chicken or the egg? 1638.2 The food industry: An easy money]maker or a daily battle? 1648.2.1 Marketing is really old, really, really old 1648.2.2 Can the food industry turn to a new direction and new business model? Is a revolution possible? 1658.2.3 Let’s do this together 1668.2.4 Easy money or daily struggle? 1678.3 Is the food industry really innovation driven? 1688.3.1 Innovation in the food industry is rather an antique affair 1698.3.2 IBM or Kodak: Which would you rather follow? 1698.3.3 Change or perish! 1708.3.4 Small is beautiful and creative 1708.3.5 Change your business model 1718.4 The perceived value of the R&D organization: It’s in the eye of the beholder 1728.4.1 Why R&D is useless… 1728.4.2 And why R&D is great! 1738.4.3 It’s because of the tax man 1748.4.4 The sense of urgency is really missing 1748.4.5 “Good]weather” versus “bad]weather” managers 1758.4.6 Constraint is good, smartly dealing with it is better 1768.5 Summary and major learning 177References 179Part 3 DISRUPTIVE OUTLOOK FOR THE FOOD INDUSTRY’S R&D 1819 Outlook to other industries’ R&D organizations 1839.1 Introduction 1839.2 Brief historical review 1849.3 Let the journey begin: What we can learn from their players and industries 1849.3.1 Google 1849.3.2 Google X 1859.3.3 Back to Google X and the future 1869.3.4 Google Research 1879.3.5 Google for Entrepreneurs (GfE) 1889.3.6 Google Ventures 1889.3.7 Westfield Labs: Designing the mall of the future 1899.3.8 Attack on the the brick]and]mortar model by e]tailers Zappos and Amazon 1909.3.9 The rise of social shopping 1919.3.10 Traditional industries meet tech 1939.3.11 The art of dating 1939.3.12 Learning from the least sexy industry role model 1949.4 Halftime 1959.4.1 The lean startup methodology 1969.4.2 The lean network approach: The nomad approach 1969.4.3 R&D]I]Y 1969.4.4 The IKEA effect 1979.4.5 Open source 1979.4.6 The street is your R&D lab 1989.4.7 Projects to promote interdependence 1999.5 Summary and major learning 199References 19910 Utopia or visions for the future: A new reality? 20110.1 What if I had a magic wand? My first set of magic tricks 20110.1.1 Abracadabra… 20210.1.2 Integration across the borders in the food industry 20210.1.3 Open innovation still remains much of a lip service approach 20310.1.4 Brand strength is volatile 20410.1.5 Store brands become more popular, or so it seems 20510.1.6 Let’s join forces 20510.1.7 We have to accept that there are problems out there 20610.1.8 We need to take the consumers’ fears seriously 20610.1.9 It’s so confusing out there, please help me! 20710.1.10 The new business model 2.0 20810.1.11 The R&D]centric company model 2.0 (equally applicable to model 2.1) 21010.2 What if I had a magic wand? My second set of magic tricks 21110.2.1 Change is inevitable in all areas! 21210.2.2 The new product will be know]how 21310.2.3 That’s what’s important for business model 2.1 21410.2.4 Here are the details 21510.2.5 Some calculations, just examples 21610.2.6 The company can earn more with model 2.1! 21710.2.7 More changes: A new type of employee 21810.3 The new scientists and engineers: A new type of people 21810.3.1 The new educational focus: Communicate 21910.3.2 Choose your words and help me to understand 22010.3.3 That’s what it takes 22010.4 The new R&D organization 22110.4.1 Change is a risky business 22210.4.2 Here’s the list 22210.5 Summary and major learning 224References 22611 Testing the hypotheses 22711.1 Too good to be true or simply wrong? 22711.1.1 Let’s look at business model 2.0 first 22811.1.2 Let me take stock 22811.1.3 Model 2.0: It’s either all or nothing 22911.1.4 We don’t want to change anything; all is just perfect or is it not? 23011.1.5 It’s about time for R&D to jump into the driver’s seat 23111.1.6 What about business model 2.1? Too disruptive and outlandish? 23211.1.7 So, what’s bad about model 2.1? 23311.1.8 We better start the gradual transition today 23311.1.9 It’s all about people 23411.1.10 Selling the intangible: The new mantra 23511.2 The new people: What does it mean? 23511.2.1 Really new people with a new level of education are needed 23611.2.2 And there has to be more 23711.2.3 Hiring by committee 23811.3 Some case studies: Personal views 23811.3.1 Charlie and the chocolate factory 23911.3.2 It’s all about talking to clients 23911.3.3 Observe and learn; don’t impose and remodel 24011.3.4 Citius, altius, fortius 24011.3.5 Some reasons for the separation 24111.4 Business model 3.0 for R&D 24211.4.1 Change was in the air 24311.4.2 A short commercial 24311.4.3 Change or perish 24411.5 Summary and major learning 245Reference 24712 Summary, conclusions, learning, and outlook 24812.1 The typical R&D organization in the food industry 24812.1.1 You are too old for marketing 24912.1.2 How it all started 24912.1.3 Why R&D? 25012.1.4 Everything’s a project 25112.1.5 And here came the strategic business units 25112.1.6 Clever project management 25212.1.7 The role of the SBUs and how it influenced R&D 25212.1.8 The rituals: Consumer research, business plans, and the project definition 25312.1.9 A critical view of today’s R&D organizations in the food industry 25312.1.10 People in the food R&D 25412.1.11 Discovery and innovation: More projects 25512.2 Understanding intellectual property 25512.2.1 We want to own everything: Should we really? 25612.2.2 Service: An added value for any food company 25612.2.3 What are other companies doing? What is my company working on? 25712.2.4 I want to know who stands behind the competencies 25712.2.5 What’s my IP worth? 25812.3 New approaches and perspectives for change 25812.3.1 Something’s wrong in the state of R&D 25812.3.2 Consultants: A necessary evil? 25912.3.3 Lessons from marketing and operations 25912.3.4 Evolutionary change in a typical R&D organization 26012.3.5 How would consumers see changes in the food industry’s R&D? 26012.3.6 Consumer research isn’t everything; sometimes it’s actually the only thing 26112.3.7 Consumer groups and the public opinion 26212.3.8 University perspectives for change 26312.3.9 IP: The intellectual gold rush 26412.3.10 What does the food industry know about the world of academia? 26412.3.11 Nutrition, medical science, claims, and regulatory 26512.3.12 Where to get the money from: The role of grants and awards 26512.3.13 Academics as consultants 26512.3.14 What’s the future direction? 26512.3.15 Scientific publication in the future: Multidisciplinary future and collaboration 26612.3.16 Industry perspectives regarding change in food R&D 26612.3.17 Food and beverage companies are really old 26712.3.18 Anticipate change or be forced to change 26812.4 Outlook to R&D organizations in other industries 26812.4.1 And the winner in the innovation competition is 26912.4.2 The street is your lab 26912.5 The vision for the future: Testing the vision 26912.5.1 The new reality for the food industry’s R&D and for the entire food industry 26912.5.2 The new suggested business models 27012.5.3 Brand strength is becoming increasingly volatile 27012.5.4 We are not there yet 27112.5.5 This change is going to be really tough 27212.5.6 Testing the hypotheses: First model 2.0 27212.5.7 What about suggested business model 2.1? Too disruptive and detached from reality? 27312.5.8 Finally, here yet another business model 3.0 for the R&D in a food company 273Reference 274Index 275